Page 12 - May 2020 Web.indd

DOLLARS AND SENSE by Tolbert Rowe

Payment forbearance merely kicks the can down the road
and the can gets bigger with every missed payment

thought the April 1 headline Comptroller Franchot makes it all sound A more popular way of forbearing
“Franchot: Working or not, don’t so easy to ask for forbearance, and for payments is to just add the unpaid
pay your bills just yet” was an those with FHA, VA, Fannie Mae or payments to the end of the loan. No need
April Fool’s joke, but as I read, Freddie Mac mortgages it actually is. to worry about coming up with a large
e
I r
I alized the Comptroller was You can be granted 90 days basically chunk of money as you would if you had
dead serious. His suggestion that all just for asking with the condition that to make the payments all at one time.
Marylanders, working or not, should you are suff ering in some way because But depending on how long you have
hoard their cash and ask mortgage of Coronavirus. But forbearance is not had your mortgage, the unpaid interest
lenders, landlords, utility companies, forgiveness. on the payments missed compounds so
etc. for 90-day forbearance of payments that three missed payments could add 4-
Not making a payment in any given
instills more fear in Marylanders. And 6 months or more to the end of the loan.
month, without late payment penalties
it will put many people in a world of
does not relieve you of responsibility of Another “Gotcha” of not making
hurt when the missed payments need
repaying that amount at some point. You payments on a mortgage happens if
to be repaid or made up. I understand
need to understand when being granted you are escrowing for property taxes and
and support the idea that those facing
payment forbearance of exactly when insurance. Not making three mortgage
financial hardship due to Coronavirus

you will be expected to repay the missed payments means your escrow account
should ask for relief. But for Comptroller
payments. will be three months short. Be prepared
Franchot to encourage those who are
in September or October to find out that

still working and not confronted with Most lenders would like to collect the
financial trauma to ask for the same unpaid balance upon the end of the you need to make up a shortage that,
relief is fi nancially irresponsible. forbearance period. This is the absolute depending on your monthly escrow,

worst way to have to repay because could be as much as $1,000 or more.
Why should those who are still working the total of all the unpaid payments Landlords are in a different position

reap the same benefit as those who are comes due at one time, at the end of than mortgage lenders. Landlords need
not? What gives those still gainfully the forbearance period. If you follow tenants to pay rent so they can pay
employed the right to expect the same the Comptrollers suggestion you would their mortgage payments, taxes, and
benefit when their bellies are full, the have to come up with three payments at insurance. If the tenant does not pay rent

expense of a roof over their head taken one time, or immediately be delinquent the landlord will either have to come up
care of and their health and physical for the unpaid balance, which also could with funds from other resources or ask
needs taken care of? What valid reason put you in default and the lender could their lender/mortgage holder to grant
can be given that the employed can ask technically foreclose, repossess, or send them a forbearance of payments ,and
for relief while their neighbors may be the account to collections. Some relief, the cycle repeats itself each month that
suff ering fi nancial devastation?
Huh? rent is not paid.
If the landlord evicts the tenant in
today’s depression economy, they will
need to find another tenant to replace

“Your Mortgage Consultant Since 1985”
them. Not an easy task where 22 million

Purchase or Refinance people filed for unemployment in the
last four weeks.
Regardless of which type of loan you
are requesting forbearance on, you will
be expected to pay it back. Payment
forgiveness is the only way you are
115 E Dover St. Ste 3 - Easton, MD absolved of making the payment and
tolbert@baycapitalmortgage.com C. Tolbert Rowe, you are not liable for paying anything
www.baycapitalmortgage.com NMLS Vice President/Lending back. You must fully understand the
182844
terms of repayment of the unpaid
410-819-3005 / cell 410-310-3520 balance. If you are unable to repay the

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